Recombinant human CC10 protein (rhCC10) is a novel therapeutic agent used to prevent the development of chronic respiratory morbidity (CRM; repeated respiratory infections, asthma, re-hospitalizations) in preterm infants. Native CC10 protein is a natural anti-inflammatory and immunomodulatory factor produced by Clara Cells in the lung and is the most abundant protein in respiratory mucosa. Animal data demonstrate that a single intratracheal dose of rhCC10 protein administered shortly after birth reduces lung inflammation, promotes normal lung development, preserves lung architecture, improves pulmonary function, suppresses the response to endotoxin and enhances resistance to pulmonary infections. In preterm infants who die or develop lung inflammation and subsequent bronchopulmonary dysplasia (BPD), both the concentration and activity of CC10 protein are significantly reduced indicating that CC10 protein is essential for preventing lung injury and promoting normal lung development. In a small Phase 1 study, recombinant human CC10 protein significantly decreased several indices of pulmonary inflammation in the lungs of premature infants who were at risk of developing BPD and associated chronic respiratory morbidity. The drug appeared to be safe, well-tolerated, and reduced risk of re-hospitalization due to respiratory illness for 9-10 months after a single intratracheal dose at the time of birth (0 of 11 recombinant human CC10 protein-treated infants versus 3 of 6 placebo treated). This supports the protective role of recombinant human CC10 protein against damage from hyperoxia, mechanical ventilation, inflammation, and infection in the immature lung. A more normal airway epithelium will produce significantly more endogenous CC10 protein, with both factors contributing to enhanced resistance to infections, less asthma, and improved long-term respiratory outcome. The applicant proposes to conduct a Phase 2 clinical trial to evaluate rhCC10 protein in extremely premature infants (<29 weeks gestation) for the prevention of BPD and chronic respiratory morbidity (CRM). This will be a randomized, double-blind, placebo-controlled dose escalation study in 88 premature infants. A single intratracheal dose of study drug (rhCC10 protein or placebo) will be administered to preterm infants receiving surfactant and mechanical ventilation for treatment of respiratory distress syndrome. Infants will be followed to evaluate safety, pharmacokinetics, and short and long term efficacy of this approach. Safety will be evaluated through serious adverse event (SAE) and adverse event monitoring and by Bayley neurodevelopmental assessments at 18 months corrected gestational age (CGA). Efficacy measurements will include the primary combined endpoint of alive without evidence of CRM at 12 months CGA comparing recombinant human CC10 protein treated to placebo controls. This will be defined by parental diaries and pulmonary questionnaires.